More than 100 managers, agents subpoenaed in probe

More than 100 investment managers and their placement agents have been subpoenaed by New York Attorney General Andrew M. Cuomo as part of his two-year investigation into alleged pay-to-play schemes involving the $122 billion New York State Common Retirement Fund, Albany, Mr. Cuomo announced today. Subpoenas were issued to 53 unregistered placement agents and 49 investment firms that paid fees to these agents, according to a news release from Mr. Cuomo. The firms were not identified, and spokesmen for Mr. Cuomo did not return calls seeking more information. Mr. Cuomo’s preliminary inquiry found that between 40% and 50% of the placement agents used by the state fund and the five New York City pension funds, with combined assets of $83 billion, were not registered with a broker-dealer, according to the release. In a news conference today, Mr. Cuomo said it is his unofficial opinion that all placement agents should be eliminated. “These are middlemen fundamentally that are selling access to a public pension plan … this is (a discussion) between a government official and a private company, and it is an area fraught with peril,” Mr. Cuomo said at the news conference. New York state Comptroller Thomas P. DiNapoli, sole trustee of the state retirement fund, has banned the use of all placement agents by the fund. The $30.3 billion New York City Employees’ Retirement System was the first of the city pension funds to ban the use of such agents, following a call by William C. Thompson Jr. New York City comptroller and adviser to the funds. Also today, Mr. Cuomo conducted a conference call with representatives of 36 state attorneys general to discuss the ongoing investigation. “We decided to create a multistate task force to explore pension fund abuse so states can share vital information to prosecute wrongdoing and facilitate nationwide reform,” according to a statement on Mr. Cuomo’s website. “The task force will allow us to have a unified, efficient method for gathering information as we fight to combat corruption and restore transparency and integrity to public pension funds.” Mr. Cuomo did not identify the states represented in the task force and press officers from his office did not return calls seeking more information.